Healthcare Policy In the 114th Congress: A Brief Outlook

The November 2014 elections put Republicans firmly in control of both Houses of Congress. At the same time, GOP Leaders, especially Senate Leader Mitch McConnell (KY), have come under increased pressure from the party’s more conservative elements to use the budget reconciliation process as a means to repeal the Patient Protection and Affordable Care Act (ACA). I often tell my students that process trumps policy. Whoever controls the process can determine what policies even get considered. The congressional budget process is a shining example.

The Budget Process

Under the Congressional Budget and Impoundment Control Act of 1974, as amended, Congress must pass a concurrent resolution on the budget. This legislation must be passed in the exact same form by both Houses but does not require the President’s signature. In the Senate, a budget resolution is privileged legislation and is not subject to a filibuster. It can be passed with a simple majority of those present and voting.

The budget resolution may also contain “reconciliation” instructions to various House and Senate committees to report legislation, by a date certain, which deals with taxes, entitlement spending, and/or the debt limit. A reconciliation bill in the Senate may be considered for up to 20 hours, after which it can also be passed with a majority of those present and voting. A reconciliation conference report can be debated for up to 10 hours and passed with a simple majority. The legislation must be signed by the President to become law. Many Republicans want to use this process to give President Obama a choice of repealing some or all of the ACA or shutting down the government.

ACA and the Budget Process

Senator McConnell has suggested repealing the ACA using the reconciliation process. Proponents argue such a bill could easily be passed by House and Senate Republican majorities.

But there is a problem. First, the Congressional Budget Office (CBO) has scored the ACA as a budget savings. Both the House and Senate have adopted rules which prohibit using the reconciliation process to consider any matter that would increase mandatory spending and the deficit.

Second, and more important, is the Byrd Rule and the issue of “extraneous matter.” The rule prohibits inclusion in a reconciliation bill any matter unrelated to the deficit reduction goals of the reconciliation process. If a matter is considered extraneous, it is subject to a 60-vote Budget Act point-of-order. There are six criteria for determining if a matter is extraneous.

  1. It does not produce a change in outlays or revenues;
  2. It produces an outlay increase or revenue decrease when the instructed committee is not in compliance with is instructions.
  3. It is outside of the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure.
  4. It produces a change in outlays or revenues which is merely incidental to the non-budgetary components of the provision.
  5. It would increase the deficit for a fiscal year beyond the “budget window” covered by the reconciliation measure.
  6. It recommends changes in Social Security.

Nothing in the 1974 Budget Act prevents Congress from passing more than one budget resolution which would contain reconciliation instructions. This could be used to require multiple reconciliation bills intended to repeal the medical device tax, raise the definition of the work week from 30 to 40 hours, and repeal the employer mandate. Of these items, the medical device tax appears to have the greatest bipartisan support. However, much would depend on a ruling by the Senate parliamentarian as to whether such legislative language violates the Byrd Rule.

Some Republicans argue there is a remedy scoring issues by requiring CBO to use dynamic scoring for tax and entitlement legislation. McConnell has express support for dynamic scoring, which predicts changing fiscal policy impacts by “forecasting the effects of economic agents’ reactions to incentives created by the policy.” In addition, current CBO Director Douglas Elmendorf’s four-year term is up in 2015. The Speaker of the House and the President pro tempore of the Senate jointly appoint the CBO director. With GOP control of both Houses, the Leadership could appoint someone inclined to agree with dynamic scoring. It remains to be seen how dynamic scoring might impact partial or full ACA repeal.

Other Health Matters

In addition to congressional attempts to repeal some or all of the ACA, the U.S. Supreme Court has agreed to take up King v. Burwell. The issue is whether subsidies can be made available under federally-operated exchanges. Subsidies under state-operated exchanges are not at issue. Should the plaintiffs prevail, over 9 million people may lose their health insurance in those states with federally-operate exchanges. A decision is not likely until June 2015.

Finally, the Children’s Health Insurance Program (CHIP) expires next year. Its biggest champion, Senator Jay Rockefeller (D-WV) is retiring at the end of the 113th Congress and there is no immediate champion in the wings.

Thus, those individuals and organizations concerned about healthcare policy face an unsettling 2015.


Julius W. Hobson, Jr. is Senior Policy Advisor at Polsinelli P.C. and Adjunct Professor of Political Management at George Washington University.

Morning Consult